Basic benefit values were cut from 40% to 30 percent of the average wage in the early-1990s. Those cuts were dubbed Ruthenasia in recognition of the role of the then Minister of Finance of the newly-elected National Party Ruth Richardson who delivered the budget with the cuts.
Today the value of an adult “Jobseeker Support” benefit has been further reduced to only 16% of the average wage. This was achieved because under both Labour and National governments since then all benefits only increase by the movement of the Consumer Price Index not average wage movements.
A sole parent benefit has gone from over 50% of the average wage to 25%.
In addition, the number of people accessing an unemployment benefit in relation to the household labour force survey estimate of the number of unemployed people has halved from around 100% to only 50% since 2004. Nearly all the decrease occurred under the Labour government.
Escalating housing costs are the final nail in the coffin for low wage income and beneficiary household. The lowest 20 percent of earners spent 54 percent of their income on housing in 2015, compared with just 29 percent in the late 1980s.
A class war has been waged by the very rich owners of capital on working people and the poor more generally.
The share of total household income going to families in the bottom 40 percent has fallen from 24 percent in the mid-1980s to 19 percent last year.